How Web3 Technology is Revolutionizing Marketing?
Points, member rewards, and loyalty programs have been marketing tools that we have been using for years in the Web2 era. However, with the emergence of Web3, we are seeing a shift back to points as a marketing tool, but this time with a twist. Today, Web3 projects are using token incentives and evolving loyalty programs to create new opportunities by integrating blockchain technology. In this article, we will explore how NFTs, DeFi, DAOs, and other new technologies are combining with traditional marketing tools.
In the Web2 era, user participation did not equate to ownership, and consumers were unable to share in the growth dividends of companies. Users could browse on Facebook, shop on Amazon, and contribute a significant amount of data and time, yet they struggled to gain equity in the platforms. Ultimately, the final baton of monetization was passed to retail investors through IPOs, leaving them and users disconnected from this capital game. This led to a severe imbalance of interests.
The introduction of Web3, starting with Bitcoin, brought about a new incentive model with the advent of cryptocurrencies. Users could participate in projects through mining, trading, and other means to earn native tokens and become true stakeholders. This led to the popularity of ICOs, enabling users to directly invest in early-stage projects, bypassing the layers of VC scrutiny. Airdrops took financial inclusivity to the next level, providing users with the opportunity to receive project tokens for free by making contributions.
During the DeFi era, liquidity mining became prominent, allowing users to earn project tokens by providing liquidity and participating in governance. This achieved the concept of “participate to mine,” creating a close-knit community of users and projects.
However, liquidity mining also exposed some issues, such as rapid token inflation, users seeking short-term gains by quickly selling pledged tokens, and a lack of long-term incentives for users from project teams. This prompted developers to explore more sustainable incentive solutions, giving rise to points.
The points mechanism combines the essence of traditional loyalty programs with Web3 token incentives. It rewards users for their contributions in dApps, such as transactions, social interactions, and gaming activities. Points can be redeemed for digital assets like NFTs, used for project governance, or converted into tokens at a predetermined ratio in the future. Unlike liquidity mining, points are usually not directly tradable, and the rules and timing of converting them into tokens are controlled by the project teams. This prevents excessive inflation and discourages users’ short-term speculative behavior.
Furthermore, points are revolutionizing the user experience by integrating the latest blockchain technology. For example, Token Bound Accounts bind user identities, points, and NFTs together, enabling seamless points management and utilization. Evolving NFTs can dynamically update their attributes based on user contributions, stimulating their desire for collection. Pledging NFTs can provide unique benefits to users, such as participation in project governance or earning point bonuses. These innovative applications transform points from mere numbers into a system closely connected with identity, social interactions, and entertainment.
Moreover, technologies like Sponsored Transactions eliminate transaction fees for users, reducing barriers to entry, while Account Abstraction enables social media login and eliminates the need for users to manage private keys. These technological innovations make it easier for more users to participate in the Web3 points economy.
How will the points mechanism evolve in the future? With the continuous maturation of the Web3 ecosystem, we can expect to see more imaginative incentive models emerging. On one hand, with the development of cross-chain technology, points have the potential to break down ecological barriers and achieve full-chain circulation, creating greater value space. For example, one of the winning projects at ETH Denver this year utilized ERC-6551 for buying and selling airdrop points. On the other hand, with the rise of DAOs, points may be deeply integrated with mechanisms like community governance and profit distribution, directly translating user contributions into decision-making power and revenue rights.
By utilizing points, project teams no longer need to conduct extensive pre-sale token sales. With points, retail investors can “invest” earlier and potentially obtain tokens at a cheaper price than waiting for the Token Generation Event (TGE).
However, due to the unclear timing of airdrops and the ratio of points to tokens, this tool is more advantageous to project teams compared to previous airdrops. It is effective only when there is a high level of trust between users and project founders, as users must believe that their points will be reasonably converted into tokens within a reasonable timeframe. As the popularity of points programs increases, there may be bad actors who abuse this trust. Ultimately, serious breaches of trust involving significant amounts of funds could lead to the failure of points as a fundraising and user participation tool.
Nevertheless, overall, the rules of the Web3 game are moving towards a healthier direction. By harnessing the innovative potential of blockchain technology, brands can establish a transparent, fair, and trustworthy points economy that allows every user to share in value growth.
Opinion articles present diverse views and do not represent the position of “WEB3+”.
Proofreading Editor: Shao Yuanting
